Ethnicity Pay Gap Consultation Briefing

As Voice4Change England approaches our twentieth anniversary, our message remains the same. We stand against the marginalisation of racialised communities and advocate for sustainable and equitable systems. The purpose of this briefing is to show our solidarity with Black, Asian and Minoritised Ethnic communities for the Equality (Race and Disability) Bill; mandatory ethnicity and disability pay gap reporting. We support the introduction of mandatory reporting, along with the related consultations.

In the UK, Office for National Statistics (ONS) data across the economy from 2012 to 2022 shows that Asian workers earn less than equivalent white workers, while Black workers face an even bigger earning deficit. This gap is a day-to-day problem and lies at the heart of many socioeconomic issues.  

In 2016 the government asked Baroness McGregor-Smith to examine the barriers faced by people from ethnic minorities in the workplace and consider what could be done to address them. Her 2017 report Race in the Workplace states that no workplace can show commitment to ending racial disparities unless they know their starting point and monitor their success over time. For this reason, it has recommended that large employers must publish their pay gap data annually.   

This is an important issue that Voice4Change England has advocated for and will continue to do so. In our open letter to the government, we recommended legislating the ethnicity pay gap for long-term systemic change. In our research with ACEVO, Home Truths recommended civil society organisations to publish their ethnicity pay gap. We explored how the ethnicity pay gap explains why certain groups in our society are situated within pay disparities. In the UK, more and more organisations are beginning to voluntarily expose their ethnicity pay gap data, increasing from 30% in 2020 to 44% in 2023.  

The legislation of ethnicity pay gap reporting will help us to deeply understand a societal problem that deserves more urgency and structural support. We can live in a society where people are accountable and honest, creating a journey towards meaningful race equity. Voice4Change England hopes that the government shows commitment to strengthen the position of workers and create healthier generations.  

Now is the time to mandate the ethnicity pay gap reporting with an action plan.  

Question 1: Do you agree or disagree that large employers should have to report their ethnicity pay gaps?  

Agree.   

We believe employers should report their ethnicity pay gaps. This will help us strengthen the position of workers by driving forms of equity. It is important to ensure organisations are doing everything they can to close the gap with the resources they have.  

Without data, it will be significantly difficult to address intergenerational inequality. Employers aren’t just places we work; they shape our livelihoods, wellbeing, and life chances. Organisations with over 250 employees are more likely to have public visibility and influence in their sector, creating a new standard for UK workplaces. Large employers reporting the data will offer a deep insight into unique challenges faced by Black, Asian and other ethnic minority groups on representation, discrimination and equal pay.

Question 2: Do you agree or disagree that large employers should have to report their disability pay gaps?   

Agree.  

Question 3: Do you agree or disagree that ethnicity pay gap reporting should have the same geographical scope as gender pay gap reporting?  

Agree.  

This is especially important given the Labour Government’s pledge to address structural inequality through the Race Equality Act, by addressing full right of equal pay for Black, Asian, and other ethnic minority people and strengthening protections against dual discrimination.  

All groups who face disparities in ethnicity and gender pay gap reporting should be recognised across the UK, particularly those who are at risk of dual discrimination. This will show a commitment to address pay penalties that affect women, particularly those from an ethnic minority background and help address the issue of women in lower-paid roles and a lack of promotion and progression.   

Question 4: Do you agree or disagree that disability pay gap reporting should have the same geographical scope as gender pay gap reporting?   

Agree.   

It is important to recognise how various pay gaps intersect and increase disparities. 

The disability pay gap is 17.2%, meaning non-disabled employees earn on average £2.35 an hour more than disabled workers. Having the same geographic scope will demonstrate that the government is looking out for all citizens by addressing pay disparities on a national level.   

Question 5: Do you agree or disagree that employers should report the same 6 measures for ethnicity pay gap reporting as for gender pay gap reporting?  

Partially agree.   

Many organisations may be more familiar with the measures required for gender pay gap reporting, which is helpful for following an existing framework, building consistency.   

However, there are significant differences between the two pay disparities. The gender pay gap is typically binary (male and female). In the ONS census, there are seventeen different ethnicity backgrounds listed.   

To follow transparency as well as reliable data collection, we agree with Shared Action’s recommendation to share.  

1. The percentage of an employer’s total UK workforce identifying as Black or from other minority ethnic backgrounds

2. The percentage of employees who have chosen to disclose their ethnicity  

As well as the other six:  

3. Quartile pay band  

4. Median ethnicity pay gap  

5. Mean ethnicity pay gap  

6. Median bonus gap   

7. Mean bonus gap.  

Question 6: Do you agree or disagree that employers should report the same 6 measures for disability pay gap reporting as for gender pay gap reporting?   

Agree.  

Question 7: Do you agree or disagree that large employers should have to report on the ethnic breakdown of their workforce?    

Agree.   

The more accurate the data of ethnicity pay gap reporting, the more meaningful this legislation will be. It will also help with clarity. For example, an organisation may report that employees from ethnic minority backgrounds are, on average, paid more than their white counterparts. While this may be true in some cases, disparities often persist. A specific ethnic group, for instance, could still be paid less than all their colleagues within the same organisation. Without a detailed ethnic breakdown, these differences can be masked. It is important to recognise and address the varied experiences within the workforce and this can be done by reporting ethnic breakdowns of the workforce.   

Question 8: Do you agree or disagree that large employers should have to report on the breakdown of their workforce by disability status?   

Agree.  

Question 9: Do you agree or disagree that large employers should have to submit data on the percentage of employees who did not state their ethnicity?  

Agree.   

We can use this to understand the reliability of the data and for transparency, accountability and improved data quality.  

Question 10: Do you agree or disagree that large employers should have to submit data on the percentage of employees who did not state their disability status?   

Agree for similar reasons stated above.   

Question 11: Do you agree or disagree that employers should have to produce an action plan about what they are doing to improve workplace equality for ethnic minority employees?  

Agree.   

It is the action that follows that will make publishing data more meaningful. This can lead to the value of accountability and measuring progress over time. Reducing pay disparities can positively influence social well-being, economic stability, and the long-term sustainability of organisations and individuals.   

If organisations feel lost with action plans, consultants and the third sector can help develop targeted action plans that identify and tackle the ethnicity pay gap.   

Question 12: Do you agree or disagree that employers should have to produce an action plan about what they are doing to improve workplace equality for disabled employees?   

Agree.   

Employers should be required to produce an action plan to improve workplace equality for disabled employees. As mentioned above, clear and accountable planning is essential for driving meaningful and sustained change. This would help ensure that employers are not only collecting data but actively addressing barriers and embedding inclusive practices.  

Question 13: Do you agree or disagree that public bodies should also have to report on pay differences between ethnic groups by grade and/or salary bands?  

Agree.  

A significant contributor to the ethnicity pay gap is the overrepresentation of ethnic minority staff in lower-paid grades and salary bands. For example, a 2024 parliamentary ethnicity pay gap report found that ethnic minority colleagues remain concentrated in the lowest pay grades (HL3–HL5), which directly impacts average pay levels and widens the pay gap.  

Reporting by grade and salary band helps address a common shortfall in ethnicity pay gap calculations: where organisations may appear diverse overall, yet Black and Minoritised Ethnic employees are concentrated in the lower quartiles. This level of detail is essential to understanding and tackling structural barriers to reduce the gap.  

Question 14: Do you agree or disagree that public bodies should also have to report on recruitment, retention and progression by ethnicity?   

Agree.    

Names from ethnic minority backgrounds play a significant role in recruitment. Research by the British Sociological Association reveals that individuals with ethnic names are more likely to face unemployment because employers reject their applications.  

A major factor contributing to the ethnicity pay gap is the lower retention and progression rates for Black, Asian, and minority employees compared to their white peers. These trends may reflect a lack of inclusive culture, discriminatory practices, or unequal access to development opportunities.

To address ethnicity, pay gap disparities effectively, organisations must analyse recruitment, retention, and progression data. Some organisations have adopted strategies to strengthen internal recruitment and promotion processes to benefit underrepresented groups and identify disparities.  

Question 15: If public bodies should have to report on recruitment, retention and progression by ethnicity, what data do you think they should have to report?  

Public bodies should report on the following data, disaggregated by ethnicity:  

Recruitment:  

• The number of applicants by ethnicity.  

• The percentage of shortlisted and appointed candidates by ethnicity.  

• The methods of recruitment (e.g. internal, external, agencies) and whether these vary in outcomes by ethnic group.  

Retention:  

• Average length of service by ethnicity.  

• Exit interview themes, where ethnicity data is voluntarily disclosed.  

• Staff survey responses on inclusion, belonging, and workplace culture, analysed by ethnicity.  

Progression:  

• Access to development, training, and talent programmes.  

• Internal promotions by ethnicity and movement between pay quartiles.  

• Ethnic breakdown of senior leadership, board membership, and management roles. 

Question 16: Do you agree or disagree that public bodies should have to report on pay differences between disabled and non-disabled employees, by grade and/or salary bands?   

Agree.  

Question 17: Do you agree or disagree that public bodies should have to report on recruitment, retention and progression by disability?   

Agree.  

Question 18: If public bodies have to report on recruitment, retention and progression by disability, what data do you think they should have to report?   

• Number and percentage of applicants who declare a disability  

• Success rates at each stage of the recruitment process (application, interview, offer, acceptance)  

• Type of disability where disclosed (in anonymised categories, e.g., physical, mental health, neurodivergence)  

• Use of reasonable adjustments during recruitment and interviews.  

Question 19: Do you agree or disagree that ethnicity pay gap reporting should have the same reporting dates as gender pay gap reporting?   

Agree.  

Question 20: Do you agree or disagree that disability pay gap reporting should have the same reporting dates as gender pay gap reporting?   

Agree.  

Question 21: Do you agree or disagree that ethnicity pay gap data should be reported online in a similar way to the gender pay gap service?   

Agree.  

Question 22: Do you agree or disagree that disability pay gap data should be reported online in a similar way to the gender pay gap service?   

Agree.  

Question 23: Do you agree or disagree that ethnicity pay gap reporting should have the same enforcement policy as gender pay gap reporting?   

Disagree.  

The UK’s Equality and Human Rights Commission (EHRC) currently holds enforcement powers for gender pay gap reporting.   

Enforcement is based on submitting their data, not whether it is accurate. This is already a problem, as gender pay gap reports frequently contain mathematical errors and inaccuracies from at least 1,000 organisations according to a statistician from Personnel Today. Without adjusting the enforcement policy, the true scale of pay disparities remain unknown.   

Trades Union Congress have highlighted the need to expand enforcement powers to include penalties for false or misleading data for ethnicity pay gap reporting in 2019. Enforcement needs address false reporting, not just non-reporting.  

Question 24: Do you agree or disagree that disability pay gap reporting should have the same enforcement policy as gender pay gap reporting?   

Agree.  

Given the limited current data on disabled workers' pay and the barriers they already face in the workplace, even basic mandatory reporting with existing gender pay gap style enforcement would be a step forward.  

Question 25: Do you agree or disagree that large employers should collect ethnicity data using the GSS harmonised standards for ethnicity?   

Agree.  

Question 26: Do you agree or disagree that all large employers should report ethnicity pay gap measures using one of the binary classifications as a minimum?   

Agree.   

While granular reporting is ideal, allowing large employers to report using binary classifications as a minimum is a practical starting point.   

This approach helps address privacy concerns, especially in departments with low numbers of ethnic minority staff, while still embedding ethnicity pay gap reporting into employer practices. It also provides a consistent baseline for comparison across organisations and can encourage more detailed breakdowns over time.  

Question 27: Do you agree or disagree that there should be at least 10 employees in each ethnic group being reported on? This would avoid disclosing information about individual employees.  

Agree.   

Voice4Change England recommended in our Home Truths: Undoing racism and  

delivering real diversity in the charity sector report that all charities with five or more full time equivalent staff publish their ethnicity pay gap data alongside a statement of context and future intent.  

Question 28: Do you agree or disagree that employers should use the ONS guidance on ethnicity data to aggregate ethnic groups? This would help protect their employees’ confidentiality.

Agree.  

The ONS guidance is widely recognised and aligns with many data collection practices across the UK, including the Census. It provides a consistent and standardised framework for collecting and aggregating ethnicity data, which many people are already familiar with. The guidance allows for detailed reporting across 17 ethnic categories while also enabling responsible aggregation to protect employee confidentiality.   

Aggregating ethnic groups can help protect individual staff identities, particularly in smaller organisations or teams where certain ethnic groups are underrepresented. Using this framework would support comparability across organisations and ensure  data is handled in a respectful, informed, and secure way.  

Question 29: Is there anything else you want to tell us about ethnicity pay gap reporting?   

No.